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The Best And Most Recommended Healthcare Stocks For 2013

Herbalife (HLF)
Best Yielding Healthcare Stock
Best Healthcare stocks with buy ratings originally published at "long-term-investments.blogspot.com". This month I like to discover the best recommended stocks from all sectors at the capital market. I like to start with the healthcare sector, one of the biggest ones. Here are some facts for our statistical lovers:

The healthcare sector has 540 companies with a health related business model. The total market capitalization of all stocks is 64.5 trillion. Stocks from the healthcare sector have an average P/E ratio of 20.78 and they pay in average a dividend yield of 3.37 percent. The best dividend paying industries are major drug manufactures and Biotechnology companies. Biotech’s are now the second best yielding category with an average industry yield of 2.13 percent.

Below is a small list with some fundamentals about the most recommended higher capitalized stocks from the healthcare sector. I excluded stocks with a market capitalization below USD 2 billion because I think the risk should be much higher as for mid-capitalized stocks.

These are the results: Nine of the 20 best rated stocks pay dividends. Half of the results are large caps and all stocks have positive expected mid-term earnings per share growth. Yes, healthcare is still a growth opportunity.

Here are my favorite stocks:
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Herbalife (NYSE:HLF) has a market capitalization of $3.56 billion. The company employs 5,100 people, generates revenue of $3.454 billion and has a net income of $412.58 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $634.12 million. The EBITDA margin is 18.36 percent (the operating margin is 16.28 percent and the net profit margin 11.94 percent).

Financial Analysis: The total debt represents 14.08 percent of the company’s assets and the total debt in relation to the equity amounts to 36.35 percent. Due to the financial situation, a return on equity of 78.78 percent was realized. Twelve trailing months earnings per share reached a value of $3.88. Last fiscal year, the company paid $0.73 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.48, the P/S ratio is 1.03 and the P/B ratio is finally 6.81. The dividend yield amounts to 3.64 percent and the beta ratio has a value of 1.68.


”Long-Term
Long-Term Stock History Chart Of Herbalife (HLF)
”Long-Term
Long-Term Dividends History of Herbalife (HLF)
”Long-Term
Long-Term Dividend Yield History of Herbalife (HLF)

Sanofi SA (NYSE:SNY) has a market capitalization of $125.26 billion. The company employs 113,719 people, generates revenue of $46.255 billion and has a net income of $6.417 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13.501 billion. The EBITDA margin is 29.19 percent (the operating margin is 16.18 percent and the net profit margin 13.87 percent).

Financial Analysis: The total debt represents 15.41 percent of the company’s assets and the total debt in relation to the equity amounts to 27.46 percent. Due to the financial situation, a return on equity of 10.42 percent was realized. Twelve trailing months earnings per share reached a value of $2.99. Last fiscal year, the company paid $1.75 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.85, the P/S ratio is 2.70 and the P/B ratio is finally 1.69. The dividend yield amounts to 3.57 percent and the beta ratio has a value of 0.94.


”Long-Term
Long-Term Stock History Chart Of Sanofi SA (SNY)
”Long-Term
Long-Term Dividends History of Sanofi SA (SNY)
”Long-Term
Long-Term Dividend Yield History of Sanofi SA (SNY)

Covidien (NYSE:COV) has a market capitalization of $27.33 billion. The company employs 43,400 people, generates revenue of $11.852 billion and has a net income of $1.902 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.044 billion. The EBITDA margin is 25.68 percent (the operating margin is 20.34 percent and the net profit margin 16.05 percent).

Financial Analysis: The total debt represents 22.64 percent of the company’s assets and the total debt in relation to the equity amounts to 47.70 percent. Due to the financial situation, a return on equity of 18.66 percent was realized. Twelve trailing months earnings per share reached a value of $3.92. Last fiscal year, the company paid $0.94 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.74, the P/S ratio is 2.31 and the P/B ratio is finally 2.58. The dividend yield amounts to 1.80 percent and the beta ratio has a value of 0.85.


”Long-Term
Long-Term Stock History Chart Of Covidien (COV)
”Long-Term
Long-Term Dividends History of Covidien (COV)
”Long-Term
Long-Term Dividend Yield History of Covidien (COV)


Take a closer look at the full list of the 20 most recommended healthcare stocks. The average P/E ratio amounts to 24.61 and forward P/E ratio is 13.46. The dividend yield has a value of 0.71 percent. Price to book ratio is 7.74 and price to sales ratio 5.35. The operating margin amounts to 17.35 percent and the beta ratio is 1.02. Stocks from the list have an average debt to equity ratio of 0.64.

Here is the full table with some fundamentals (TTM):


Healthcare Stocks With Buy Rating (Click to enlarge)


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Related stock ticker symbols:
HLF, SNY, COV, UNH, NVO, TMO, RDY, UHS, COO, WPI, SIRO, GILD, HCA, HOLX, JAZZ, MDVN, ALXN, ARIA, BMRN, CELG

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*I am long HLF. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.